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CSEET · Fundamentals of Accounting · Introduction to Company Accounts

Sundaram Ltd. forfeited 100 equity shares of Rs 10 each, Rs 8 called up, on which the holder had paid only Rs 5 per share (application and allotment). What is the amount credited to Share Forfeiture Account?

Share Forfeiture Account is credited with Rs 500, being the amount actually received on 100 shares at Rs 5 each. The called-up amount of Rs 800 is debited to Share Capital, and the unpaid Rs 300 is credited to Calls in Arrears.

  1. ARs 800
  2. BRs 300
  3. CRs 500Correct
  4. DRs 1,000

Explanation

Amount received = 100 x Rs 5 = Rs 500, which is credited to Share Forfeiture Account. Rs 800 is the called-up capital debited, and Rs 300 is the unpaid call credited to Calls in Arrears. Rs 1,000 is the face value and is wrong.

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